Update: 3D Realms/Apogee Ltd. founder Scott Miller has chimed in with his thoughts:

Do readers here realize that filed lawsuits are entirely one-sided statements, based on knee-deep BS and with more spin that[sic] a top?

3DR has been in nearly a dozen lawsuits (including against Warner and Fox). We're always innocent, and we always win. This one is no exception. Give it a year, then the truth will come out.

Original: More documents relevant to the ongoing courtroom drama between Duke Nukem Forever developer 3D Realms/Apogee Ltd. and publisher Take-Two have been released, shedding new light on the circumstances that lead to the termination of the game's dev team and the subsequent lawsuit over the game's incomplete state.
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The team handling the long-in-development shooter was let go on May 6, with 3D Realms later explaining that this stemmed from funding issues after negotiations with Take-Two fell through and the publisher made an "unacceptable" last minute proposal "to acquire the Duke Nukem franchise and the 3DR development team."

The court documents reveal that those negotiations were related to an Xbox 360 port of the anticipated game, which Apogee subsidiary 3D Realms was crafting for the PC.

In early 2009, Take-Two "solicited" 3D Realms to see if the studio could co-develop an Xbox 360 edition. In the following negotiations, 3D Realms apparently "demanded that Take-Two fully fund Apogee's reaching certain milestones" if it was to co-develop an Xbox 360 edition alongside the long-coming PC version.

Duke Nukem Forever was formally announced in 1997, with the game then expected the next year. Since then, the title has suffered from numerous delays and setbacks.

Take-Two was reluctant to fully fund the game "in light of the extensive delays in development of the PC version," and says it offered to fund half of the "concurrent development" costs "up through" 3D Realms hitting the "Alpha Milestone," with the remaining half to be paid upon completion of the game.

Take-Two claims that 3D Realms rejected the above proposal.

3D Realms paints a slightly different picture of the above scenario. In a recent press release, 3D Realms stated that Take-Two, after months of negotiations, "materially changed the parameters of the proposed funding agreement" into something 3D Realms could not "financially afford," with 3D Realms then rejecting the "unacceptable" proposal Take-Two made for the franchise and development team.

With the game's development now halted and its development team disbanded, Take-Two says that 3D Realms "breached its commitment" to deliver the "completed source code of DNF in a timely manner," a move that also prevents Take-Two from porting the game to consoles, such as the Xbox 360.
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As part of a 2000 agreement to "promote and exploit" Duke Nukem Forever, Take-Two claims it has "exclusive, irrevocable and worldwide rights to develop" DNF for consoles. Take-Two further adds that the agreement allowed the company to "independently develop" console ports once 3D Realms had delivered the PC source code .

In terms of compensation, Take-Two believes it is entitled to the incomplete source code--which would help "in the development of the Console Versions of DNF"--along with "damages equal to...lost profits caused by Apogee's failure to timely develop and deliver" DNF PC and "an award of damages equal to the DNF Advances with accrued interest."

3D Realms received two advances for Duke Nukem Forever: $400,000 from former publisher GT Interactive in 1998--a debt Take-Two assumed when it acquired the DNF publishing rights--and $2.5 million from Take-Two Interactive in 2008.

According to Take-Two, that second advance was provided with the stipulation of "7% per annum" interest after September 2009, and an agreement that the sum would "become immediately due" if Duke Nukem Forever was not released by October 22, 2012.

Perhaps most shockingly, Take-Two claims that "upon information and belief, [3D Realms/Apogee Ltd.] has title to a substantial amount of funds deposited in an off-shore account, which Take-Two believes Apogee can use to fund its outstanding obligations."

Take-Two further notes that, in the event of "any future development of the Console Versions of DNF," 3D Realms and Apogee are "required to cooperate"--suggesting that there may still be a chance of Duke Nukem Forever, in some form, hitting store shelves.

Shacknews has contacted 3D Realms for comment, with the company having already expressed its belief that "Take-Two's lawsuit is without merit and merely a bully tactic to obtain ownership of the Duke Nukem franchise."

If you're interested, the full 20-page court document can be found over on FileShack.